Execs see China as place to boost career
March 25th, 2006By KATHERINE YUNG / The Dallas Morning News
Bobby Carter shows all the symptoms of China fever.
Each week, he meets with a private tutor to learn Mandarin. On airplanes, he listens to language tapes. And in his spare time, he reads books about the Asian powerhouse and blogs written by expatriates living there.
China "is really intriguing to me. I want to experience it," said Mr. Carter, 44, UPS' international sales and marketing manager for the Southwest region.
Although he's traveled in the region for his job, now he wants to work full time in China, for at least a few years.
"Who would think in our lifetime we would have the opportunity to be pioneers in anything?" he said.
As China evolves into an increasingly important market for many U.S. companies, a growing number of Americans are eager to work there, despite potentially formidable obstacles of language and culture.
Interest in China extends beyond multinational corporations. Increasingly, managers at small- and mid-size businesses are volunteering for forays in China, seeking excitement, riches and a career boost.
"It's not a hardship," said Louisa Wong-Rousseau, managing director of China for Stanton Chase International, an executive search firm. "People see going to China as a career advancement."
Though many in China prefer to hire locals, a shortage of skilled executives means expatriates remain in demand, said Lisa Johnson, director of consulting services for Cendant Mobility, a large relocation company.
Many companies award assignments in China to their rising stars, she said. "It's where a lot of companies' future is."
According to a Cendant Mobility study conducted last year, people moving to China for business reasons are typically married men in their early 40s.
Shanghai, China's most cosmopolitan city, ranks as the top destination for expatriates. But a growing number of them are headed to less well-known places such as Chengdu, Dalian and Tianjin.
For example, Dallas attorney Ryan Greene recently accepted a job with EnterHealth China LLC, which manages two hospitals in the Chongqing area. The firm aims to become a leading provider of health care services in China.
Mr. Greene, 34, already has an apartment leased and furnished for him in Chongqing. Initially, he plans to spend half his time in the southwestern Chinese city and the remainder in Dallas.
'Industrial revolution'
After three trips to China, he has developed an admiration for the Chinese people's work ethic and culture. "In the next five to 10 years, everyone is going to be going over there," he said. "I want to be on the leading edge of that transition.
"What's happening there is so amazing," he added. "It's the industrial revolution in early 19th-century America all over again."
Americans who have taken the plunge and moved to China often find the experience an eye-opener.
In November 2004, Nokia Oyj employee Ron Davenport sold his house and two cars in Grapevine and moved to a gated community in Beijing.
Now, he is helping develop low-cost phones at Nokia's product creation center in Beijing.
"The pace is quite frantic," Mr. Davenport, 41, said of the Chinese business environment. "But I am much more sensitive to growth in other parts of the world."
For Mark Abe, living in China became a necessity. The 40-year-old executive for Plano-based Electronic Data Systems Corp. arrived in Beijing three months ago to help his company win information technology services contracts from Chinese airlines, airports and other air services providers.
"It's very hard to build those relationships when you're flying in and out," he said.
The expatriate from Orange County, Calif., quickly learned that conducting business in China requires forming personal relationships, not just making sales calls.
"The business models that are prevalent here in China are different from ones in other parts of the world," he said, referring to the nation's many state-owned firms.
"Don't wait," he advised others considering working in China. "The country is changing so fast. Jump in with both feet and don't look back."
A few challenges
Taking on a China assignment does involve some challenges and adjustments.
Chief among them is finding health care that meets U.S. standards, according to the Cendant Mobility study.
An unhappy spouse and children can also cause problems.
"Make sure your family really wants to come," said Mr. Davenport, who moved to Beijing with his wife and two of his three daughters. (The oldest daughter lives on her own in the U.S.)
Mr. Davenport said his wife and daughters are thriving in Beijing because of their outgoing and independent personalities. His middle daughter has found a new hobby, snowboarding in the nearby mountains. His youngest, a second-grader, is studying Mandarin.
Once expatriates and their families adapt to life in China, the hardest part is often coming home.
Attorney Carter Meyer endured a difficult transition when he and his wife returned to Dallas in August 2004 after living in Beijing and Tokyo for a little more than two years.
"It was hard getting used to it," he said. "I missed the [Chinese] food quite a bit. I missed the people."
During his time abroad, Mr. Meyer traveled throughout Asia. In China, language didn't prove to be a huge barrier because most of the professionals he met spoke English.
And to their delight, he and his wife were able to save a lot of money but still live comfortably, with help from a driver and a housekeeper.
Mr. Meyer, 37, recently left Vinson & Elkins to become head of a small venture capital firm. But if the right opportunity came along in the future, he would consider going back to Asia.
"On a résumé, it has a lot of credibility," he said of his time spent in China. And "I appreciate the size of the world a lot better."
http://www.dallasnews.com/sharedcontent/dws/bus/stories/032106dnbuschinawork.296484f.html
China's draft labor law worries foreign firms
March 25th, 2006By UNITED PRESS INTERNATIONAL
Published March 21, 2006
BEIJING -- A proposed Chinese labor law has foreign companies worried that China is giving power back to the state-backed trade union.
According to a draft of the Labor Contract Law, released late Monday, the union would have to be consulted about mass layoffs and approve companies' rules for employees. It also would have the right to negotiate on behalf of workers through collective bargaining, the South China Morning Post reported Tuesday.
State media said the National People's Congress had invited public comment on the draft law for next month, after the full text was posted on the NPC's Web site.
Companies claim the proposed law marks a step backward for China's economic reforms by taking away flexibility in hiring and firing.
The law requires companies to pay a full year's salary to employees departing under "non-compete" agreements, a level far higher than in Western countries.
The planned law also sets the length of probation for new employees and requires companies to make severance payments to workers on fixed-term contracts if their contracts are not renewed.
Criticizing foreign companies for failing to install unions, state media have threatened to draw up a blacklist. Companies also must hand over a mandatory payroll tax to the union.
http://www.wpherald.com/storyview.php?StoryID=20060321-101225-2734r
Firms recruiting in China find few fits
March 25th, 2006By RALPH JENNINGS
BEIJING (Kyodo) Japanese companies trawling for new hires at the second annual Beijing job fair have found few skilled applicants among the latest group of graduates.
Employers taking part in the Japan Chamber of Commerce and Industry in China's second annual weekend job fair on March 11 at Beijing Normal University said they found few good matches.
They want people with technical skills but many job-seekers were Japanese language specialists with little work experience.
"People who understand technology don't know Japanese, and the people who understand Japanese don't know technology," said a Chinese sales official at a Chinese branch of Matsushita Electric Industrial Co.
The job fair drew some 800 people -- fewer than the 1,000, hoped for -- from about 100 universities. A total of 33 companies participated, taking resumes and holding brief interviews with the job-hunters.
Companies collected an average of about 20 resumes each. Of those, three or four might have the qualifications for open jobs, recruiters said.
"The feeling isn't that good, because they don't meet our needs," said Wang Huan, an account manager with the Beijing branch of Hitachi Information Systems (Shanghai) Ltd.
She said she wanted mostly experienced workers, not the college students who came to hear about Hitachi's 15 job openings in Beijing.
The class of 2006 is a large one, due to a surge in university enrollments four years earlier, and now graduates are finding it more difficult than they expected to find good jobs. The People's Daily reported recently that 4.1 million university students will enter the job market this year, 700,000 more than in 2005.
Graduates expect to make roughly 3,000 yuan to 5,000 yuan ($ 373 to $ 621) per month, enough to give something back to parents who paid their tuition as a family investment.
The Japan Times: Tuesday,March 14, 2006
In China, That Ivy League Degree Isn't Gold
March 19th, 2006from The Asian Wall Street Journal November 01, 2005
China still is a magnet for ambitious, Western-educated entrepreneurs coming home to start high-tech companies and cash in on China’s economic boom. Take Charles Zhang, the Massachusetts Institute of Technology-trained founder of Web portal Sohu.com Inc., and Edward Tian, who earned a doctorate in the U.S. and once charmed Rupert Murdoch into joining the board of his Beijing telecommunications company.
But this favored class isn’t looking quite so favored, at least in the eyes of venture capitalists looking to invest in China. The trend is largely anecdotal, but for many “seed capitalists” poking around Beijing and Shanghai, slick Westernized returnees are out. Local, rough-around-the-edges entrepreneurs are in.
“The less English you speak, the better,” says David Zhang, a venture capitalist in Beijing with San Francisco’s WI Harper Group. He and other investors say locally trained executives often are more thrifty with cash and better understand local Chinese markets – and businesses that know how to tap them – than people who have been abroad for years.
“A lot of the returnees, actually, they have lost touch with China,” agrees Vincent C.H. Chan, a managing director at Jafco Asia, part of Jafco Co. of Japan.
Instead of courting Ivy League graduates with slick business plans, Messrs. Zhang and Chan are plowing money into no-frills Chinese start-up businesses such as wireless-services provider China Broad Media Corp. The company, funded by WI Harper, is the brainchild of Tian Song, an entrepreneur who went to college in Beijing and toiled in the state-owned telecommunications sector there. He says, through a translator, that his only visit to the U.S. was a brief trip to Las Vegas.
Jafco has helped to finance such entrepreneurs as Zhou Hongyi, who founded Chinese Internet search-engine concern 3721 Network Software Inc. Yahoo Inc., intrigued by Mr. Zhou’s technology – it enables people to use Chinese characters to search the Web – bought the company nearly two years ago for US$120 million.
Some returnees may have “studied in a good school,” says Andy Yan, managing partner of Hong Kong investment firm SAIF Partners. But “when they come back, they think they know everything.”
One of Mr. Yan’s favorite home-grown success stories is Hu Xiang, a founder of SAIF portfolio company Mobile Antenna Technologies (Shenzhen) Co. Mr. Hu, 52 years old, is about as far from a polished returnee as one can get in China: He doesn’t speak English and missed nearly 10 years of schooling during the Cultural Revolution that began in the 1960s. Mr. Hu dug tunnels and later was a low-level factory worker, sometimes going hungry.
That Mr. Hu suffered during the Cultural Revolution and had to work so hard for his success, instead of leading a more comfortable life abroad, appealed to Mr. Yan. “We’ve been through so much,” says Mr. Yan, who had similar experiences. “The challenges now don’t seem so big.”
After spotting a business opportunity in supplying locally produced wireless antennas in China – and being inspired by a Chinese translation of “The HP Way” management tome – Mr. Hu started his own company. Mobile Antenna says it has about US$40 million a year in contract sales and makes gear for such Western companies as Lucent Technologies Inc. and Harris Corp. of the U.S. Networking giant Cisco Systems Inc., of San Jose, Calif., is an investor.
To be sure, a significant number of Western-educated Chinese businesspeople will continue to snare funding from overseas venture capitalists. That is particularly true in high-tech fields in which China doesn’t have much local expertise. Returnees also can help implement basic business practices that aren’t always common at home-grown Chinese businesses: the U.S.-educated Mr. Tian, for example, says employees at his first Chinese start-up company sometimes had trouble organizing quarterly earnings numbers on time, or even using telephone voice mail.
Many U.S. financiers have little choice but to continue to deal with China’s English-speaking elite: Most American venture firms don’t have Mandarin-speaking partners on the ground in China.
Still, focusing only on returnees can mean missing out on good deals. And returnees often demand stock options and Silicon Valley-type salaries, Mr. Zhang of WI Harper notes. That can drive up costs and lower profits for venture investors.
Local chief executives often better understand consumer tastes and trends that drive industries like Internet commerce and mobile communications in China, Mr. Yan of SAIF says. A degree from a foreign university is no longer a must; China’s economy is expanding so rapidly it offers many opportunities to learn management skills.
A case in point, Mr. Yan says, is Mr. Hu at Mobile Antenna. Lacking English skills and the resources to go abroad, Mr. Hu eventually earned a degree at a Chinese university. He built a career in academia and at a state-owned electronics factory, moving to the giant Chinese telecommunications concern ZTE Corp. in 1991.
Like many entrepreneurs stuck in big companies, Mr. Hu became restless. In an interview, he says he saw how ZTE spawned a local, Chinese supply chain for telecommunications gear used in fixed-line phone networks. By 1994, he saw mobile-phone use skyrocketing in China and figured the companies building the mobile networks would need a nearby, low-cost supplier of wireless components.
He left ZTE in 1997. Two years later, he started Mobile Antenna with a few partners and about US$370,000. They struggled at first, he says, but gradually improved product quality and won big international firms as customers. The company now has nearly 570 employees and is building a new office in another part of Shenzhen.
He has done well enough to send his daughter to Boston College in the U.S.
- Rebecca Buckman
Staff Reporter of The Wall Street Journal
CHINA WATCH: Cheaper, Better Managers Sought Abroad
March 14th, 2006http://au.biz.yahoo.com/060220/18/jtei.html
Monday February 20, 2006, 5:14 pm
CHINA WATCH: Cheaper, Better Managers Sought Abroad
By Jane Lanhee Lee Of DOW JONES NEWSWIRES
SHANGHAI (Dow Jones)--Tired of the revolving door of Chinese managers and the rising salary with each new hire, Paul Stepanek decided it was time to find cheaper talent elsewhere. So he went to India.
For roughly the same salary as his previous Chinese quality assurance manager, Stepanek recruited 32-year-old Indian engineer Sandeep Sharma, who speaks English and has about a decade of experience.
"We've had a new manager every year for the past seven years. When you lose a manager...you lose all the history that you've had and all the training that's gone into it," Stepanek said. His company, USActive, helps U.S. firms source metal and plastic machine parts in China and helps manage their factories, including that of Milwaukee-based manufacturer Jason Inc. (JAS.XX), where Sharma works.
As foreign companies like Jason set up Chinese factories in droves, there is an increasing shortage of competent managers capable of dealing with foreign clients. With English-language skills more important than a mastery of Chinese, companies are recruiting from India and the Philippines - a trend that is expected to get bigger before, eventually, enough local Chinese are trained by multinational companies in English and other skills to begin filling the gap.
"Anybody in Shanghai can go out and look for a job tomorrow and get a job that's going to pay 20% to 100% more than their current salary, because there are so many companies that are coming into China every week, every month," said Stepanek, an American who speaks fluent mandarin Chinese and has lived and worked in Taiwan and China for 18 years.
Over the next decade or 15 years, China will need 75,000 executive level managers who can work both in China and in a global setting - compared with an estimated 3,000-5,000 now, says Andrew Grant, who last year published a report, "China's Looming Talent Shortage."
Grant is a director and leads the Greater China practice of global consulting firm McKinsey & Company (MCK.XX).
"A lot of people had the somewhat superficial assumption that China's a very large place with lots and lots of people. Therefore the notion that there is a talent shortage in any way, must just be a misnomer," said Grant. "But now they are taking the challenge seriously."
Thanks to Detroit, China Is Poised to Lead
March 14th, 2006http://www.nytimes.com/2006/03/12/business/yourmoney/12ford.html?_r=1&oref=slogin
By KEITH BRADSHER
Published: March 12, 2006
CHONGQING, China
Soaring Sales, Hot Competition
VOLKSWAGEN and other carmakers used to prosper by sending outdated factory equipment to China to produce older models no longer salable in the West. But competition has become so fierce here that Honda is about to introduce its latest version of the Civic only several months after it went on sale in Europe, Japan and the United States. Toyota, meanwhile, is assembling its Prius gasoline-electric sedan only in Japan and China.
When Ford Motor opened its first production line here in western China just three years ago, it used a layout copied from a Ford factory in the Philippines to produce 20,000 sedans a year based on a small car design taken from Ford operations in India.
But this winter, Ford opened a second production line next door that is practically identical to one of its most advanced factories, the Saarlouis operation in southwestern Germany. The new line produces the Focus, the same small car it builds in Germany (but different from the Focus sold in the United States). And with continuing improvements to the first line, it will bring total capacity here to 200,000 cars a year by June.
The Chinese managers here are not even satisfied with that. "I want to learn from Germany and then improve on it," said Li Jianping, the factory's vice director of manufacturing.
Ford's success in rapidly expanding the scale and sophistication of its Chongqing operations illustrates how quickly the overall auto industry is expanding and modernizing in China. One requirement for a country to become an automobile exporter is to develop a highly competitive domestic market that demands excellent quality and efficiency, and China has managed to create just such a market.
American and European carmakers, including Ford, General Motors, DaimlerChrysler and Volkswagen, as well as Toyota, Honda and Nissan of Japan are introducing their best technology to their plants in China, and not only to compete against one another. They also face rapidly growing competition in the Chinese market from purely local companies like Geely, Chery and Lifan.
These indigenous Chinese automakers captured 28.7 percent of the market in January, the first time in many years that Chinese brands have been pre-eminent — ahead of brands from Japan (27.8 percent), Europe (19 percent), the United States (14 percent) and South Korea (10.3 percent), according to Automotive Resources Asia, a consulting firm in Shanghai.
The multinationals "really have to bring their latest models," said Yale Zhang, an analyst in the Shanghai office of CSM Worldwide, an auto consulting company based in the Detroit suburbs. "Even average consumers understand if this is not the latest model."
Multinational joint ventures in China produced a total of 2.3 million family vehicles last year.
In the race to be No. 1 in China, the world's fastest-growing car market, multinationals from the United States, Japan and Europe are falling over one another to share their latest designs, technology and manufacturing expertise with Chinese partners. But industry experts say that the sharing has helped China prepare to become a major car exporter within four years, increasing the pressure on G.M., Ford and other industry giants, which are already losing sales and market share to foreign rivals.
Few auto executives now doubt that the successful Chinese companies that emerge from the free-for-all in their home country will be ready to tackle world markets. "I've seen the Chinese vehicles in China from various, various brands, and I've said it's a threat that will come to the U.S., I think, by the end of the decade," said Thomas W. LaSorda, Chrysler's chief executive.
All of the multinationals rapidly expanding in China say that their main goal lies in serving the Chinese market and not in exports. Still, Honda is already exporting small cars from China to Europe, while DaimlerChrysler is negotiating to build very small cars in China for sale in the United States, probably under the Dodge brand.
Until the last few years, China's main advantages in the global auto manufacturing market were in its cheap labor and its talent for copying older Western designs, often while avoiding licensing fees, a practice that cut research and development costs to almost nothing.
Wages of less than $200 a month remain a big advantage for China, but it is developing another. Domestic and foreign automakers are starting with clean slates to build new operations, using efficient approaches and advanced management methods. It is similar to the way German and Japanese companies built new and more efficient factories starting in the 1980's, mostly in the American South, helping them to leap beyond Detroit's expertise.
G.M. and its local partner, the Shanghai Automotive Industry Corporation, built an extensive vehicle design and engineering studio in Shanghai that has just finished a redesign of the Buick LaCrosse for the Chinese market.
Soaring Sales, Hot Competition In the central city of Wuhan, Honda has just finished quadrupling the capacity of its joint-venture factory with the Dongfeng Motor Group, to 120,000 cars a year. It is also starting to build the Civic there. The expansion, costing $350 million, took just a year, half as long as a comparable expansion in the United States.
Perhaps most tellingly, on Dec. 15 Toyota began assembling Prius hybrids in the northern city of Changchun. The world's multinationals had long been leery of transferring proprietary technology to make hybrid gasoline-electric engines in China, for fear that it would be copied. While Toyota is still cautious, China is nonetheless the only place besides Japan where Toyota is assembling the Prius, arguably its most important car in a decade.
Furthermore, Volkswagen said in September that it would jointly develop a hybrid minivan for the Chinese market with Shanghai Automotive — a project that is likely to give the Chinese automaker a significant understanding of the technology.
THE risk for the multinationals is that their inventions may be turned against them. When G.M. followed Volkswagen into the Chinese market in the mid-1990's, it was assigned the same partner: Shanghai Automotive, which announced plans on Feb. 23 to begin assembling and selling its own brand of cars in China while retaining the joint ventures. Other Chinese partners of multinationals are expected to follow suit in the next several years.
G.M., Ford, Volkswagen and other multinationals continue to work with Chinese partners because the government here requires them to do so. Foreign companies must assemble cars in 50-50 joint ventures with local partners. Honda alone has a 60 percent stake in a factory: a plant in Guangzhou that makes cars only for export.
Chinese automakers are also buying modern technology and design themselves. Chery has hired some of the best-known Italian auto design firms to spruce up its cars. When the MG Rover Group of Britain entered bankruptcy proceedings last year, the Nanjing Automobile Group outbid Shanghai Automotive to take control of Rover and its fairly modern engine-producing subsidiary, Powertrain Ltd., and move it to China.
The Lifan Group, a car and motorcycle maker with headquarters several miles from the Ford plant here, is bidding to buy one of the world's most advanced engine factories, a joint venture of DaimlerChrysler and BMW in southern Brazil.
But running efficient factories can often be even more important than buying the latest, most expensive robots. The Hafei Group, an automaker in Harbin in northern China, discovered this when it installed expensive European and Japanese automated equipment four years ago, only to find that its disorderly factory layout was less efficient and less flexible than its aging factory next door, where workers used hammers and other hand tools in smoky air.
Inventory control is another matter. Many Chinese auto factories keep extensive, costly stockpiles of parts on hand, whereas new Western-designed factories, including the engine operation in southern Brazil, are designed to receive frequent but small shipments from suppliers. Chinese manufacturers are now learning from their Western partners how to operate with this just-in-time delivery of parts.
The best way to appreciate how car manufacturing in China has changed is to look at the Ford factory here, a 50-50 joint venture with the Chongqing Chang'an Automobile Company. The first production line was supposed to be simple, relying heavily on manual labor and producing a sturdy Fiesta sedan of older design. Teams of local managers and workers were sent to the Philippines and India to learn the craft.
But the second line now includes robots to weld the stiff bodies of the Focus sedans for a more precise ride. Another robot applies the adhesive that holds the windshield in place, as in Germany. One small difference is that a robot guides the windshield into place in Germany, while people do so here, said Mr. Li, whom Ford sent to Germany for four weeks to study the system there.
Wang Cheng-guo, a strapping 23-year-old with a two-year degree in computer hardware from a technical college, started working at the Ford factory in 2004. Each day, he had to strain to lift 50-pound seats by hand into sedans on the first production line here.
Mr. Wang said that with five eight-hour days a week and pay that has now reached nearly $200 a month, the job nonetheless looked good to him when compared with his father's job at a nearby Chang'an car factory. His father, 48, has worked from 7 a.m. until 11 p.m. at that factory, with few vacations, for almost 30 years. While his father still pushes racks of parts to the assembly line, the son earns more, even with a much shorter schedule.
"When I was young, I rarely saw him," said Mr. Wang, who with his first Ford paycheck bought his mother a thick green winter coat and took his parents to a traditional spicy dinner of Chongqing hot pot.
Three months after Mr. Wang joined the factory, Ford improved the first production line by installing an electrical boom to help him swing the seats into the cars. When he concluded that the boom made a time-consuming pivot in the wrong direction and asked that it swing into the car from a different angle, local managers soon made the change — an adjustment that might have languished for months in more bureaucratic factories in other countries.
Mr. Wang, recently engaged, is now making all sorts of plans, the kind that millions of Chinese want to make as prices fall and technology improves. "I want to get married," he said, "and get a car someday."